Denver-based EchoStar on June 22nd revealed it had bought a 3 per cent equity stake in satellite operator Inmarsat, and had mopped up 10.4 per cent of Inmarsat’s convertible bonds. The news sent Inmarsat’s share’s into orbit, rising 10.6 per cent.
The financial moves were made prior to EchoStar’s recent approach to acquire Inmarsat and were revealed under Takeover Panel rules and regulations.
EchoStar’s purchase is valued at some $109 million (and another $67 million for the bonds).
Inmarsat rejected the earlier June 8th offer, and the market is now waiting for EchoStar’s next move.
Inmarsat’s global assets include S-band, Ka and L-band capacity, and a strong client base. Inmarsat has a licence to build out an S-band network in mobile satellite communications (and EchoStar’s Dublin-based Solaris Mobile – now called EchoStar Mobile Ltd – owns another similar licence).
EchoStar has 28 days (until July 6th) to make either a firm offer or walk away. Charlie Ergen, chairman and co-founder of EchoStar (and the DISH pay-TV system) is nothing if not a renowned deal-maker, and extremely experienced in the black art of poker playing.
However, he may not be alone at the bidding table. Various reports and rumours suggest that California-based ViaSat might be a player, and Eutelsat’s name has also been mentioned.
One report also mentioned London-based Ka-band satellite operator Avanti Communications as possibly being a compensation ‘buy’ for EchoStar if the Inmarsat bid fails.